Professional Documents
Culture Documents
2d 33
pay on behalf of the insured all sums which the insured shall become legally
In addition to covering the named insureds, the policy also provided coverage
to
any person (other than an employee of the named insured) or any organization
while acting as real estate manager for the named insured . . ..
Mellies performed his duties without incident until August 27, 1971. Early in
the morning on that date Serman was walking his dog past McArthur's
apartment complex. As he passed by his dog ran onto a driveway on adjoining
property owned by one Schvaneveldt. Serman walked onto the driveway to
retrieve the dog. At the same time Mellies was returning home from an evening
out. Observing a man (Serman) and a dog on Schvaneveldt's property, he
entered his apartment, got his pistol, told his wife there was a prowler on the
premises, and went outside.1
10
At this time Mellies observed that Serman was now farther back on
Schvaneveldt's property. He told Serman to stop, said he had a gun, and asked
Serman who he was and what he was doing. Although Serman testified that he
replied, 'Hey, I'm just getting my dog,' Mellies testified that Serman said
nothing. Mellies then pointed the gun in Serman's direction and pulled the
trigger on an empty chamber. Serman started to leave, and walked toward the
corner of the Schvaneveldt building. Mellies then fired a shot into the building
and pursued Serman.
11
Upon rounding the corner of the building Serman found that he was virtually
boxed in by the surrounding building and fences. When Mellies rounded the
corner Serman jumped him and a fight ensued. During the scuffle the pistol
He instituted suit against Mellies in the District Court of Salt Lake County,
Utah. Unigard was notified of the suit but refused to defend on the grounds
Mellies was not a real estate manager under the policy, and therefore not an
insured. Serman subsequently obtained a $56,085.25 judgment against Millies.
13
14
Unigard answered and contended, inter alia, that Mellies was not a real estate
manager within the terms of the policy and that Serman's judgment against
Mellies was procured by collusion. Additionally, Unigard contended that it had
not received timely notice of Serman's claim. Serman subsequently obtained a
partial summary judgment on the issues of collusion and notice, and the case
proceeded to trial.
15
At the close of all the evidence Unigard moved for a directed verdict in its
favor. The trial court found, inter alia, that even if Mellies was a real estate
manager that he was not acting within the course of his authority as such at the
time of the shooting and therefore was not an insured under the policy.
Accordingly, Unigard's motion was granted.
16
On appeal, Serman argues that the trial court erred in granting Unigard's
motion for a directed verdict because it misconstrued the nature of the action as
one resting upon the principles of agency rather than insurance policy
construction and coverage. The dispositive issues, Serman contends, were
whether Mellies was an additional insured within the meaning of the policy
terms and, if so, whether his injurious act, in the language of the policy, arose
'out of the ownership, maintenance or use of the insured premises and all
operations necessary or incidental thereto . . ..'
17
Unigard concedes, for the purpose of this appeal, that Mellies was a real estate
manager, and thus an insured. It nevertheless argues, inter alia, that he was not
acting in that capacity at the time Serman was injured.
18
Seeking to bring Mellies' act within the ambit of a real estate manager's duties
Serman urges the general rule that the terms of an insurance policy are to be
liberally construed in favor of the insured. This rule is good law but is
inapplicable here. Admittedly, it would be helpful in determining whether or
not Mellies was a real estate manager. But that is no longer an issue. The policy
expressly provides that a real estate manager is insured only while acting in that
capacity for the named insured. The paramount question is not whether Mellies
was a real estate manager, for that has been conceded, but whether he was
acting in that capacity at the time of appellant's injury. Such a determination
depends upon the authority conferred upon him by McArthur under general
agency principles.
19
20
McArthur testified, at trial, that he had owned the apartment complex for thirtyfive years and had never experienced problems with prowlers. He stated that he
never told Mellies to perform security functions on the premises but instead
would expect him to call the police. Anything else, McArthur testified, would
be beyond his responsibility. This testimony was corroborated by Mellies, who
said McArthur had never told him to perform security functions. Thus it is
clear that Mellies was not expressly authorized to protect the premises from
alleged prowlers.
21
Nor do we believe that Mellies had any implied authority. Although the record
indicates that Mellies thought protection of the premises was one of his duties,
an agent can confer no authority upon himself. 2A C.J.S. Agency 143, p. 763
(1972).
22
23
24
Affirmed.
25
26
I respectfully dissent.
27
The appellee insurance company does not dispute the fact that Mellies was a
real estate manager and as such was within the coverage of the insurance policy
in question. However, the trial court determined that Mellies was not acting
within the scope of his authority as a real estate manager at the time of the
shooting.
28
As I view it the issue is whether Mellies was acting as a real estate manager for
McArthur. The ultimate issue is whether the facts are such as to create an issue
of fact, a question which is to be determined by the same standard in the
appellate court as in the trial court. See Swearngin v. Sears Roebuck & Co.,
376 F.2d 637 (10th Cir. 1967). This standard is whether reasonable minds could
differ based upon a consideration of the evidence in a light most favorable to
the party against whom the decision was made. See Taylor v. National Trailer
Convoy, 433 F.2d 569 (10th Cir. 1970).
29
Mellies testified that his duties included mowing, trimming, fertilizing and
watering the lawn, removal of garbage, shoveling snow, cleaning the premises,
taking care of the yard, taking care of the tools and making minor repairs. He
also testified that it was his belief that he was required to protect the people and
property. See R. 35, 75, 76, 77. He stated that the manner of performing his
duties was left largely to him. McArthur, the owner, agreed with this. McArthur
said that he did not supervise the manner of doing the tasks; that Mellies took
responsibilities very seriously.
30
He said that he had not spoken to Mellies about trespassers since he had never
had any. He said, however, that if a trespass had taken place requiring
something to be done, Mellies would have done it. He stated further that he
trusted Mellies and relied on his sense of responsibility. McArthur refused to
testify as to whether Mellies would have been expected to protect the tenants
from molestation.
31
One incident was mentioned at the trial in which McArthur was told about a
problem. But on that occasion Mellies settled the dispute. This pertained to
actions of a tenant which interfered with watering the lawn. McArthur did not
object to Mellies' handling of this.
32
Mellies testified that he had pursued plaintiff because of fear for his wife's
safety as well as because of concern for the property and safety of the other
tenants, expecially the property stored in the garage which was near where the
plaintiff was standing when Mellies first saw him on the night in question. The
garage contained not only the property of the tenants, it contained tools and
other property of McArthur.
33
34
I am of the opinion that the court erred in concluding as a matter of law that
Mellies was not acting within the course and scope of his authority as a real
estate manager and, secondly, in concluding that his pursuit of Serman was not
an occurrence which arose out of the ownership and maintenance of the
premises of the insured. Under the evidence, it was not possible for the court to
conclude as a matter of law that Mellies was not acting as manager of the
property in question but was engaged in some unrelated frolic of his own.
Similarly, the activity was a probable consequence of his employment.
35
36
In reaching its conclusion as a matter of law the trial court predicated its ruling
on the view that Mellies was merely a handyman. However, Mellies performed
a vast variety of functions, whereby the jury could have concluded that
protection was within his authorization. Furthermore, it is to be remembered
that Mellies was the sole representative of the owner living on his property, and
thus it would not be practical for him to seek out the advice of the owner in a
situation calling for immediate protection. Indeed, where this is the condition
A case quite similar to ours is Guillen v. Kuykendall, 470 F.2d 745 (5th Cir.
1972). The jury was there allowed to determine whether a ranch owner's teenage son, who customarily protected ranch cattle from coyotes with a rifle, had
authority to shoot at or over the head of trespassers on the land.
38
Finally, the trial court here placed emphasis on the fact that the incident
occurred on adjacent property. This, however, is not a valid issue where the
location is in close proximity to the property and is arguably related to it. See
Restatement of Agency 2d 234.
39
Mellies testified that his actions were prompted by recent burglaries and rapes
in the area